[2] Where a credit union becomes bankrupt after the chief director of the credit union entered into a loan contract for a union member without a resolution of the board of directors, the person entitled to exercise the right to ratification of such act (=trustee in bankruptcy)

1. As to the plaintiffs' assertion that each of the loan contracts of this case was null and void without a resolution of the board of directors as stipulated by Article 29 subparagraph 5 of the former Credit Cooperatives Act (amended by Act No. 5506 of Jan. 13, 1998), the court below held that each of the loan contracts of this case is null and void unless there are special circumstances, since there is no evidence to prove that there was a resolution of the board of directors of the United States Credit Union or a resolution of the credit committee corresponding to the resolution of the board of directors of the board of directors of the United States Credit Union as to each of the loan contracts of this case. In light of the records, the above judgment of the court below is just and acceptable, and there is no error of law as alleged in the ground of appeal No.

2. The court below rejected the above assertion on the defendant's assertion that each of the loan contracts of this case was made without the resolution of the board of directors of the United States Trade Union and thus null and void, even if it is later null and void, the defendant's ratification of the invalid contract requires mutual agreement between the parties. However, even if the defendant ratified each of the loan contracts of this case, there is no evidence to acknowledge that the plaintiffs declared the intention of ratification.

However, in full view of the provisions of Articles 1, 2, 23(4), 27, subparagraph 5 of Article 29, and Article 31(1)2 of the former Credit Union Act (amended by Act No. 5506 of Jan. 13, 1998), which was in force at the time of each of the lending contracts of this case, the president of a credit union has the authority to take charge of the affairs of the union and represent the union, and the above Act requires a resolution of the board of directors on the loans to union members, taking into account the special circumstances of a non-profit credit union, to promote the smooth management and maintenance of its assets and the sound development of its finance, and to ensure the union's proper achievement of its original purpose. Thus, even if the power of representation is restricted by a representative act of a credit union without any requirement, the right to manage and dispose of its assets can be deemed to be valid if the credit union later satisfies the requirements and then becomes able to obtain ratification of the above lending contract (see Article 20(5) of the Bankruptcy Union Act).

However, according to the records, the defendant, the trustee in bankruptcy, was made without the resolution of the board of directors, and thus, prior to the plaintiffs' assertion that each of the loan contracts of this case is invalid, it can be known that the plaintiffs urged the implementation of each of the loan contracts of this case under the premise that each of the loan contracts of this case is valid. Thus, each of the loan contracts of this case is valid due to the defendant's legitimate exercise

Nevertheless, the court below rejected the defendant's assertion of ratification on the ground that ratification of each of the contracts of this case requires mutual agreement between the parties. There is no error of law by misunderstanding the legal principles as to ratification of act of non-exclusive representation, which affected the conclusion of the judgment. The ground of appeal No. 1 pointing this out has merit.

3. Therefore, without examining the defendant's remaining grounds of appeal, the judgment of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cho Cho-Un (Presiding Justice)